Around 750 new social and affordable homes will be built in Wellington over the next ten years so the city "doesn't end up like Auckland", the Mayor has announced.
Some will be social housing, and others will be affordable homes aimed at first home buyers, which means the sale cost will be below the median house price in the capital of currently around $510,000.
Half will replace outdated stock with upgraded dwellings, and half will be new.
Ratepayers are being assured it won't have an impact on rates, with city housing funded through rental income.
Mayor Justin Lester says the project will help to sustain future populations, with increased immigration, and larger numbers of people moving to the city.
"We've seen the example in Auckland, we don't want to be another Auckland, we want to be a Wellington where people who want to be able to buy a house can afford to do so," he said.
Many of the homes will be built within the next three years, including the 105 new homes already under construction at the Arlington site in the central city.